I did a blog entry on this very topic. Something to consider when looking at a house that needs work is by who's standard. Is the work required because the house isn't up to your personal standard or is the market demanding it? Vinyl flooring, popcorn ceiling, laminate counters, paint, & carpet are all items that many buyers confuse with "needing work" however really are a perferental nature. If the house has insufficent plumbing, bad windows, leaking roof, cracked driveway, missing carpet, stained floor, missing cabinets...then it needs work. However, asking from experience, if $20,000 is out of your price range, how are you going to do the work required?

I would stay in your price range or consider finding a lender who will do a 203K loan (few do) if the home truly needs work. Additionally, work with a local expert who knows the neighborhood who can advise you on what is being offered for sale, recent solds, neighborhood price trends, days on market, average concessions, etc.

A few years back and after losing out on an incredible investment home, I nearly walked right into a home that truly needed work but was in my budget. Thankfully, I caught myself because while I could afford the home, I couldn't afford the improvements and this house was far from being acceptable.

Rachel,
The best way is to have a Real Estate Agent go over the comparables in the neighborhood or general area.

You have to be happy with the price you pay for a house, obviously, but the seller has to be happy with the price they receive on the same property.

Depending on several factors, such as comparables, time on market, area, and tons of other things, a professional Real Estate Agent can help you determine the best price and where to start making offers on a piece of property.



N. Hunter Jackson
Exit Sandlapper Realty http://www.IBlogColumbia.com
http://www.IrmoSCRealty.com

Rachel,

First, you need to have your realtor determine what the market value is for the home. Usually, this number is more of a range than an exact number. If the asking price for the home is within the range of market value, make a reasonable offer - usually never less than 90% of asking price - and be prepared to meet the seller at least halfway between your offer amount and the asking price. Market average in Greenville County for negotiation between asking price and actual sales price is around 3% and pretty much always has been. If the home is overpriced, make an offer that reflects market value, have your realtor explain the offer amount (with documentation) to the seller's agent and stick to your guns. If they won't agree to accept a sales price that is within the range of market value, obviously you need to walk away.

If the home that you referenced in your question is fairly priced and is anywhere under, say, $300,000, then I would say, generally speaking, it would be unreasonable of you to think the seller will agree to lower the sales price by $20,000. And, if this is the case, you probably should be looking more at homes that are priced in the range that you can afford. Lowball offers that are unjustifiable are a waste of everyone's time - the seller, the buyer and both agents. The average buyer, if they were on the selling end of the transaction and someone brought then a lowball offer, in all likelihood they would not even consider it, but its amazing how the same person sees things completely different when they put theii buyer hat on, so to speak. I work with buyers and sellers everyday and I see this disparity all the time.

One more thing. The market in Greenville county is very good. A number of the buyers that I am working with initially think, before I set them straight, that the market is terrible and that they will be able to get a deal as a result of the market conditions. Not so. I live in Taylors myself and I believe I can accurately call myself a market expert, expecially in Taylors, and I can tell you that the market is as good or better than it has been at any time in the last 5 years.

I hope that info helps. Let me know if I can be of further help. If you are not working with a realtor and you need me to perform some due diligence on the home you are considering, I would be happy to help with that. You can reach me anytime at 864-363-8592.

Steve Bright, Realtor
Keller Williams Realty
864-363-8592
sbright@kw.com http://www.stevebright.net